TI sells Dowty Electronic Systems for pounds 40m in cash

TI GROUP's planned pounds 100m divestment programme took a big step forward yesterday with the sale of Dowty Electronic Systems for pounds 40m cash, writes Russell Hotten.

The disposal is part of the engineering company's move to reduce borrowings following the pounds 500m acquisition of the Dowty aerospace group last year.

Electronic Systems is a group of seven high-tech defence and communications businesses, which made taxable profits of pounds 4.8m in the nine months to December 1992, and has assets of pounds 24.25m. The operation was bought by Ultra Electronics, a management buy-in headed by Julian Blogh, a former managing director of Dowty Avionics.

The sale reduces TI's borrowings to about pounds 180m, bringing gearing to 64 per cent. Sir Christopher Lewinton, chairman, said: 'The sale of these businesses represents yet another step in our strategic disposal programme. We are on target to achieve our disposal objectives by the end of 1994.'

TI said last year it wanted to make about pounds 100m of Dowty disposals to concentrate on its core aerospace businesses. That programme began last month with the sale of Dowty Fuel Systems to Lucas Industries for pounds 18.9m.